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New Delhi: Asking the government to not let another year go waste, the Congress on Tuesday said it should reverse its “disastrous” economic policies and heed the advice of experts by printing more money and increasing spending.
While Rahul Gandhi shared a graph on rising unemployment and said, “PM’s hall of shame – Minimum GDP. Maximum Unemployment”, former finance minister P Chidambaram asserted that going by the performance of the economy in the last four quarters, 2020-21 has been the “darkest year” in four decades.
All indicators point to the fact that the economy is in dire straits, Chidambaram told reporters.
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“The current state of the economy is no doubt largely due to the impact of the pandemic, but it has been compounded by the ineptitude and incompetent economic management of the BJP-led NDA government,” he alleged.
The former finance minister said good advice by distinguished economists and renowned institutions has so far been rebuffed and world-wide experience ignored.
“Suggestions on fiscal expansion and cash transfers have been turned down. Hollow packages like Atmanirbhar have fallen flat,” he said.
“We may note that Nobel Laureate Abhijit Banerjee has called for printing money and increasing spending. Yet, even as recently as yesterday morning, the finance minister gave a long interview to some newspapers defending her misguided and disastrous policies,” he said.
“If necessary the government must print money. We have the space and the sovereign right to print money,” Chidambaram said, adding that if at any point the government feels too much money is being printed, it can always stop printing money.
Taking potshots at Finance Minister Nirmala Sitharaman and her Chief Economic Adviser’s claims of a V-shaped economic recovery, he said, “It was a false story and we had expressed our strong reservations and warned there were no signs of a recovery.”
“We had pointed out that what the economy needed was a strong dose of stimulus, including increased government expenditure, direct transfers of cash to the poor and liberal distribution of free rations. Our pleas fell on deaf ears, and the result is a negative growth of (-) 7.3 per cent,” he said.
He also criticised the finance minister for treating the GST Council with disdain as she did not respond to any of the decisions pertaining to GST concessions for material used for Covid treatment.
“This is called procrastination. This is called not taking a decision. She has not responded on all decisions. What has come out of the meeting is zilch. I think the GST Council is being treated with complete disdain and contempt by the FM,” he said, calling for immediate payment of GST dues to states.
Chidambaram pointed out that unemployment is growing and has now crossed 11 per cent, labour force participation is declining and more and more people are falling below the poverty line.
“All these are indicators that the economy is in dire straits…All this points to deep misery among the poor people.
“This government is completely insensitive and completely impervious to what the lower middle class and the poor are facing,” he alleged.
On the rise in fiscal deficit, Chidambaram said, “This is not the time to worry about the fiscal deficit. It should not make any difference and it should not stop us.”
“What we need is not to lose another year like we lost last year. This is the time to act boldly and decisively. Borrow and spend…, ” he said.
The former finance minister said what is most worrying is that per capita GDP has fallen below Rs 1 lakh, to Rs 99,694.
“In percentage terms it is a decline of (-) 8.2 per cent over the previous year. It is lower than the level achieved in 2018-19 (and maybe even 2017-18). The deeply worrying conclusion is that most Indians are poorer than they were two years ago.”
He also noted that the poor are suffering and said they must be given cash transfers and liberal free rations as they need them.
The Congress leader said FICCI and CII have echoed the views and pleaded for fiscal expansion, including cash transfers to the poor.
The RBI’s monthly review has flagged the ”demand shock” and its consequences and the CMIE report on loss of jobs and growing unemployment is alarming, he said.
Research and survey reports from the Azim Premji University have concluded that 23 crore people have been pushed below the poverty line and into indebtedness, the Congress leader noted.
Chidambaram said the second wave of the pandemic is following the same pattern as the first wave, except that it has wrought more damage in terms of numbers of infections and deaths.